Following on from yesterday’s news about losses and falls in profit for Mitsubishi, Daihatsu and Hino Motors, Honda has now announced a significant loss of more than £1billion for the fourth quarter of the fiscal year 2008-2009.
With sales slumping by a dramatic 35 per cent, the company expects group operating profits to slump by 94.7 per cent to a mere Y10billion over the fiscal year which started earlier this month. Over the course of fiscal year 2008, its group net profit has fallen by 77.2 per cent to 137.01billion Yen – although this is notably better than the Y80billion it had originally predicted.
Nevertheless, with its operating profit slumping by Y189.64billion – down 80.1 per cent – the company suffered its first year-on-year drop in sales in nine years.
Worse may yet be to come for the Japanese automotive sector as a whole. Honda is expected to be the only major manufacturer to remain in the black for the past fiscal year with Nissan and Toyota predicted to announce huge losses when they release their results in May.
In an effort to cope with its financial woes, Honda has already decided to sell its motorsports team. It is expected that much of its future success will hinge on green cars such as the new Honda Insight, which is seen as a direct competitor to the Toyota Prius.
